<PAGE>
[MONETTA LOGO] FAMILY OF FUNDS
Dear Fellow Shareholders: January 17, 1997
During the past year, the financial markets continued to benefit from a
moderately growing economy, low interest rates and stable inflationary
expectations. The stock market, as measured by the S & P 500 Index, was up a
healthy 23%. The large capitalization or blue-chip stocks led the way,
significantly outperforming small-cap issues.
Last year was a very volatile period. Uncertainty over the strength of the
economy, due to conflicting data, confused investors which resulted in
significant market fluctuations.
The most recent example of the market's volatility was investors' focus on the
Federal Reserve monetary policy and the fear of rising interest rates. The
uneasiness created in November by Federal Reserve Chairman Alan Greenspan, as he
warned about "irrational exuberance" in the financial markets, sent stock prices
plummeting. Investors viewed this as a buying opportunity and as a result,
stocks quickly rebounded, confirming the market's volatility.
FUND PERFORMANCE. Generally, we were very pleased with our funds' performances
last year. The Balanced Fund, with a 25.9% return, ranked FIRST in its category
of 272 funds, and the Intermediate Bond Fund, with a return of 6.5%, ranked
SECOND within its category of 176 funds as measured by Lipper Analytical
Services. The Large-Cap and Mid-Cap funds posted returns of 28.2% and 24.2%
respectively, which not only exceeded their benchmarks but, also ranked in the
upper quartile, in their respective category of funds as measured by Lipper
Analytical Services. The Government Money Market Fund, with a return of 5.12%,
ranked 13th of 115 comparable funds as measured by Lipper Analytical Services.
Our one area of disappointment was the Monetta Fund. The fund suffered from its
poor timing of investments in the very volatile technology sector. We have
addressed the problem as outlined in the Monetta Fund's performance highlight
section. We believe that these changes should have a positive impact on future
investment performance.
MARKET OUTLOOK. The new year has begun with investor anxiety at high levels and
looking aggressively for what could go wrong in 1997. Most likely, this
backdrop will create a volatile market environment with the ultimate market
direction dependent on the resiliency of economic growth.
We currently anticipate slow economic growth, coupled with moderate inflation
and relatively low interest rates. It's hard to imagine a more positive
environment for the stock market. Overall corporate profits look fairly good
and there continues to be a large flow of investment funds into the market. As
long as interest rates remain low, stocks should remain the preferred investment
choice.
1997 should be an exciting year for the Monetta Family of Funds. I would like
to thank you for the support you have placed in us with your investment dollars.
Best personal regards,
/s/ Robert S. Bacarella
ROBERT S. BACARELLA
President and Founder
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PERFORMANCE HIGHLIGHTS
<S> <C>
Monetta Fund.................................................. 3
Monetta Mid-Cap Equity Fund................................... 4
Monetta Large-Cap Equity Fund................................. 5
Monetta Balanced Fund......................................... 6
Monetta Intermediate Bond Fund................................ 7
Monetta Government Money Market Fund.......................... 8
INDEPENDENT AUDITORS REPORT........................................ 9
SCHEDULE OF INVESTMENTS
Monetta Fund.................................................. 10
Monetta Mid-Cap Equity Fund................................... 14
Monetta Large-Cap Equity Fund................................. 16
Monetta Balanced Fund......................................... 17
Monetta Intermediate Bond Fund................................ 20
Monetta Government Money Market Fund.......................... 21
FINANCIAL STATEMENTS
Statements of Assets and Liabilities.......................... 22
Statements of Operations...................................... 24
Statements of Changes in Net Assets........................... 26
Notes to Financial Statements................................. 28
</TABLE>
FOOTNOTE:
Past performance is no guarantee of future results. The principal value and
return on your investment will fluctuate and on redemption may be worth more or
less than your original cost.
References to individual securities are the views of the Advisor at the date of
this report and may change. References are not a recommendation to buy or sell
any security.
Page 2
<PAGE>
MONETTA FUND PERIOD ENDED 12/31/96
Investment Objective: Market Capitalization Range: Total Net Assets:
Capital Appreciation/Income $50 million - $1 billion $212 million
- --------------------------------------------------------------------------------
PERFORMANCE: AVERAGE ANNUAL TOTAL RETURN
1 Year 5 Years 10 Years
------ ------- --------
MONETTA FUND 1.6% 5.3% 12.4%
RUSSELL 2500 19.0% 16.0% 13.9%
NASDAQ COMPOSITE* 22.7% 17.1% 14.0%
S&P 500* 23.0% 15.2% 15.3%
*Source Lipper Analytical Services, Inc.
[PERFORMANCE GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
Measurement Period Monetta Fund S&P 500 NASDAQ Russell 2500
- ------------------ ------------ ------- ------ ------------
<S> <C> <C> <C> <C>
3/31/87 $11,510 $12,135 $12,328 $12,204
6/30/87 11,592 12,744 12,174 12,276
9/30/87 11,216 13,585 12,736 12,878
12/31/87 10,154 10,525 9,473 9,532
3/31/88 10,784 11,122 10,740 11,060
6/30/88 12,148 11,861 11,313 11,811
9/30/88 12,431 11,901 11,114 11,713
12/31/88 12,494 12,268 10,933 11,699
3/31/89 12,884 13,138 11,660 12,603
6/30/89 13,913 14,295 12,479 13,559
9/30/89 14,573 15,823 13,557 14,549
12/31/89 14,396 16,147 13,038 13,972
3/31/90 15,168 15,661 12,485 13,583
6/30/90 16,963 16,645 13,251 14,117
9/30/90 13,690 14,360 9,875 11,015
12/31/90 16,033 15,645 10,715 11,893
3/31/91 19,002 17,913 13,824 14,921
6/30/91 19,572 17,870 13,641 14,893
9/30/91 22,220 18,825 15,102 16,173
12/31/91 24,993 20,400 16,807 17,447
3/31/92 25,153 19,886 17,307 18,193
6/30/92 23,549 20,264 16,156 17,367
9/30/92 24,248 20,902 16,719 17,841
12/31/92 26,365 21,951 19,405 20,270
3/31/93 24,617 22,909 19,783 21,231
6/30/93 24,799 23,019 20,179 21,676
9/30/93 26,728 23,612 21,866 23,209
12/31/93 26,496 24,160 22,268 23,623
3/31/94 25,796 23,245 21,313 23,099
6/30/94 24,398 23,342 20,238 22,281
9/30/94 26,116 24,481 21,909 23,879
12/31/94 24,849 24,476 21,557 23,374
3/31/95 27,245 26,858 23,427 25,101
6/30/95 29,127 29,417 26,758 27,338
9/30/95 32,757 31,768 29,914 29,966
12/31/95 31,813 33,655 30,160 30,784
3/31/96 32,303 35,462 31,572 32,588
6/30/96 33,305 37,051 33,968 33,944
9/30/96 33,245 38,196 35,171 34,710
12/31/96 32,327 41,378 37,010 36,644
</TABLE>
The graph above to the right compares the change in value of a $10,000
investment in the Monetta Fund, the S&P 500 Composite Index, and the NASDAQ
Composite Index and the Russell 2500 Stock Index. The S&P 500 and the Russell
2500 indices are a broad measure representative of the general market, while
the NASDAQ measures performance of stocks in the over-the-counter market.
Please refer to footnote on the bottom of page 2.
- --------------------------------------------------------------------------------
PORTFOLIO COMPOSITION: TOP 5 EQUITY HOLDING:
% OF NET ASSETS
Brightpoint, Inc. 2.5%
[PIE CHART APPEARS HERE Transocean Offshore, Inc. 1.8%
SHOWING % OF HOLDINGS] Titanium Metals Corp. 1.6%
P-Com, Inc. 1.4%
Comverse Technology, Inc. 1.3%
------
TOTAL TOP 5 HOLDINGS 8.6%
======
- --------------------------------------------------------------------------------
COMMENTARY:
The Monetta Fund appreciated 1.6% for the year ended December 31, 1996, versus a
19.0% return for the Russell 2500 Index.
A number of holdings posted very strong returns. Among these were APAC
Teleservices, Brightpoint, Ensco Int'l, St. John Knits and Qiagen. At the same
time, many of our companies demonstrated poor relative performance.
We were disturbed by the fact that our overall performance lagged our peer
indices. The largest single contributor to our poor performance was the
technology sector. A combination of the extreme volatility exhibited by most
technology stocks and problems in identifying an appropriate purchase point
resulted in several stocks being sold at a substantial loss.
To address this problem we have modified our stock screening process to identify
companies earlier in their growth cycle. On the sell side we are now letting
stocks appreciate until their growth reaches a plateau. If a stock declines 20%
from the highest price since purchased, it is extensively reviewed and is a
candidate for sale. This provides the dual benefit of enjoying the full price
appreciation of successful growth stocks, while reducing the stock price
volatility often associated with maturing growth companies.
We thank you for your support and patience, and are more excited than ever as we
enter 1997. At this point we have the system and personnel in place to take
advantage of the opportunities which await us, and look forward to keeping you
abreast of our progress.
Page 3
<PAGE>
MONETTA MID-CAP EQUITY FUND PERIOD ENDED 12/31/96
Investment Objective: Market Capitalization Range: Total Net Assets:
Capital Appreciation $1 billion - $5 billion $17.3 million
- --------------------------------------------------------------------------------
PERFORMANCE: AVERAGE ANNUAL TOTAL RETURN
Since Incept.
1 Year 3 Years (3/1/93)
------ ------- --------
MONETTA MID-CAP
EQUITY FUND 24.2% 16.5% 22.0%
S&P 400* 19.2% 14.6% 15.2%
S&P 500* 23.0% 19.7% 17.3%
*Source Lipper Analytical Services, Inc.
[PERFORMANCE GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
Monetta
Mid Cap
Measurement Period Fund S&P 500 S&P 400
- ------------------ ------- ------- -------
<S> <C> <C> <C>
3/01/93 10,000 10,000 10,000
3/31/93 11,670 10,080 10,220
6/30/93 11,880 10,120 10,455
9/30/93 13,120 10,383 10,978
12/31/93 13,540 10,622 11,274
3/31/94 13,475 10,218 10,793
6/30/94 13,109 10,258 10,399
9/30/94 13,887 10,759 11,103
12/31/94 13,835 10,757 10,817
3/31/95 14,835 11,804 11,692
6/30/95 16,536 12,929 12,723
9/30/95 17,603 13,955 13,965
12/31/95 17,233 14,785 14,165
3/31/96 18,717 15,579 15,037
6/30/96 19,106 16,277 15,470
9/30/96 19,855 16,779 15,920
12/31/96 21,402 18,177 16,885
</TABLE>
The graph above to the right compares the change in value of a $10,000
investment in the Monetta Trust Mid-Cap Equity Fund to the S&P 500 and 400. The
S&P 500 and 400 indices are a broad measure representative of the general
market. Please refer to footnote on the bottom of page 2.
- --------------------------------------------------------------------------------
PORTFOLIO COMPOSITION: TOP 5 EQUITY HOLDING:
% OF NET ASSETS
GreenPoint Financial Corp. 2.7%
York Int'l Corp. 2.7%
[PIE CHART APPEARS HERE Danaher Corp. 2.7%
SHOWING % OF HOLDINGS] First Tennessee Nat'l 2.6%
Kerr McGee Corp. 2.5%
------
TOTAL TOP 5 HOLDINGS 13.2%
======
- --------------------------------------------------------------------------------
COMMENTARY:
The Mid-Cap Equity Fund once again posted solid investment results for its
shareholders. For the year ended December 31, 1996, the Fund gained 24.2%, well
ahead of its benchmark index, the S&P 400 Mid-Cap Index, which was up 19.2%.
Among its peers, the Fund ranked in the top 20% of like funds as measured by
Lipper Analytical Services, which provided an average return of 17.9%.
Financial was one of the Fund's best performing sector throughout much of the
year. Two of the names that added to this year's performance were GreenPoint
Financial Corp. and Associated First Capital.
In addition, the industrial sector was overweighted in the portfolio and
performed well. In particular, Danaher Corp. was a top performer due to its
strong product line of tools and opportunistic acquisitions which produced
strong earnings per share growth.
During the 4th quarter, approximately 10% of the Fund's assets were re-deployed
from cash and equivalents into common stocks, leaving the Fund 96.5% invested in
equities at year end.
A number of companies with strong and improving growth prospects were added to
the Fund during the quarter, including Sterling Commerce, Dura Pharmaceutical,
CVS Corporation and Reynolds & Reynolds. At the same time, stocks with slowing
growth rates (e.g. Black & Decker, Autozone, and Input/Output) were sold.
The economic environment couldn't be better for common stock investing. We
believe the Fund is appropriately positioned to benefit from higher stock
prices.
Page 4
<PAGE>
MONETTA LARGE-CAP EQUITY FUND PERIOD ENDED 12/31/96
Investment Objective: Market Capitalization Range: Total Net Assets:
Capital Appreciation $5 billion + $2.3 million
- --------------------------------------------------------------------------------
PERFORMANCE: AVERAGE ANNUAL TOTAL RETURN
Since Inception
1 Year (9/1/95)
------ --------
MONETTA LARGE-CAP FUND 28.2% 25.6%
S&P 500* 23.0% 25.8%
*Source Lipper Analytical Services, Inc.
[PERFORMANCE GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
Monetta
Large-Cap S&P
Measurement Period Fund 500
- ------------------ --------- -----
<S> <C> <C>
9/01/95 10,000 10,000
9/30/95 10,000 10,482
12/31/95 10,574 11,105
3/31/96 11,344 11,701
6/30/96 11,923 12,225
9/30/96 12,864 12,603
12/31/96 13,555 13,653
</TABLE>
The S&P 500 is a broad measure representative of the general market. Please
refer to footnote on the bottom of page 2.
- --------------------------------------------------------------------------------
PORTFOLIO COMPOSITION: TOP 5 EQUITY HOLDING:
% OF NET ASSETS
Intel Corp. 3.4%
[PIE CHART APPEARS HERE Associated First Capital 2.9%
SHOWING % OF HOLDINGS] Eli Lilly & Co. 2.9%
Boeing Co. 2.8%
USA Waste Services, Inc. 2.8%
------
TOTAL TOP 5 HOLDINGS 14.8%
======
- --------------------------------------------------------------------------------
COMMENTARY:
The Large-Cap Equity Fund posted an outstanding return of 28.2% for the year
ended December 31, 1996. With this return, the Fund outperformed its benchmark
index, the S&P 500 Index, which appreciated 23.0%. The Fund was ranked 41 among
669 growth funds (top 7%) as ranked by Lipper Analytical Services, with the
average growth fund generating a 19.2% annual return.
Among the industry sector, those companies in the technology area provided some
of the strongest returns. Holdings in this area included Intel and Microsoft,
which continued their dominance of personal computer microprocessors and
operating systems, respectively.
Another area of success was Financial. Particularly strong were, Household
International, a consumer lender and Associated First Capital-CL A, which
benefited from strong loan growth from its diversified product line.
Overall, the Fund remained underweighted in Retail and Healthcare, which were
two of the worst performing sectors last year.
The growing sense of uncertainty about the economy has resulted in excessive
market volatility and an emphasis on the part of investors to favor more stable
quality companies. To capitalize on this environment, we will continue to
concentrate on a bottom-up security selection process, emphasizing those
companies that dominate their business franchise to produce strong and
sustainable earnings growth.
Page 5
<PAGE>
MONETTA BALANCED FUND PERIOD ENDED 12/31/96
Investment Objective: Market Capitalization Average Total
Range: Maturity: Net Assets:
Capital Appreciation/
Income $50 million + 3.7 Years $2.3 million
- --------------------------------------------------------------------------------
PERFORMANCE: AVERAGE ANNUAL TOTAL RETURN
Since Inception
1 Year (9/1/95)
------ --------
MONETTA BALANCED FUND 25.9% 24.3%
S&P 500* 23.0% 25.8%
LEHMAN GOVT/CORP BOND
INDEX 2.9% 6.5%
*Source Lipper Analytical Services, Inc.
[PERFORMANCE GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
Lehman
Government/ Lehman
Monetta Corporate Government/
Balanced 500 Intermediate Corporate
Measurement Period Fund S&P Bond Index Bond Index
- ------------------ -------- ------ ------------ -----------
<S> <C> <C> <C> <C>
9/01/95 10,000 10,000 10,000 10,000
9/30/95 10,000 10,482 10,000 10,000
12/31/95 10,616 11,105 10,427 10,573
3/31/96 11,131 11,701 10,340 10,326
6/30/96 11,913 12,225 10,406 10,374
9/30/96 12,547 12,603 10,590 10,557
12/31/96 13,369 13,653 10,849 10,880
</TABLE>
The S&P 500 is a broad measure representative of the general market. Please
refer to footnote on the bottom of page 2.
- --------------------------------------------------------------------------------
PORTFOLIO COMPOSITION: TOP 5 EQUITY HOLDINGS:
% OF NET ASSETS
[PIE CHART APPEARS HERE Intel Corp. 1.7%
SHOWING % OF HOLDINGS] Eli Lilly & Co. 1.6%
Sterling Commerce, Inc. 1.4%
Fluor Corp. 1.3%
Sigma Aldrich Corp. 1.3%
-----
TOTAL TOP 5 HOLDINGS 7.3%
=====
- --------------------------------------------------------------------------------
COMMENTARY:
The Balanced Fund had a spectacular year. For the year ended December 31, 1996,
the Fund's 25.9% return ranked it #1 among 272 like funds as ranked by Lipper
Analytical Services, almost doubling the 13.8% return of the average balanced
fund. The return compared favorably to the 23.0% of the S&P 500 Index, 19.0% of
the Russell 2500 Index and 2.9% return of the Lehman Govt/Corp Bond Index.
Throughout most of the year, the Fund maintained approximately 62% of its assets
in common stocks. Approximately 40% of the equity exposure was in large
capitalization stocks, with 30% in mid-cap issues and 30% in small-cap issues.
Our stock picks, up more than 40%, performed extremely well. Among the best
performing securities were Qiagen, CKE Restaurants, Ensco Int'l, TJX, Intel and
Microsoft. During the fourth quarter new stocks purchased included P-Com, Inc.,
Medquist, Foamex Int'l, Inc. and Sterling Commerce, Inc.
Approximately 35% of the Fund was invested in high grade corporate and treasury
securities with an emphasis on short-term maturities. These securities provide
income and stability to counterbalance the generally more volatile common stock
portion of the portfolio.
Page 6
<PAGE>
MONETTA INTERMEDIATE BOND FUND PERIOD ENDED 12/31/96
Investment Objective: 30-Day SEC Yield: Average Maturity: Total
Capital Appreciation/ Net Assets:
Income 5.65% 4.4 Years $2.8 million
- --------------------------------------------------------------------------------
PERFORMANCE: AVERAGE ANNUAL TOTAL RETURN
Since Incept.
1 Year 3 Years (3/1/93)
------ ------- --------
MONETTA INTERMEDIATE
BOND FUND 6.5% 6.6% 7.3%
LEHMAN GOVT/CORP
INTERMEDIATE
BOND INDEX* 4.1% 5.6% 5.7%
*Source Lipper Analytical Services, Inc.
[PERFORMANCE GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
Monetta Trust Lehman Government/Corporate
Measurement Period Intermediate Bond Fund Intermediate Bond Index
- ------------------ ---------------------- ---------------------------
<S> <C> <C>
3/01/93 $10,000 $10,000
3/31/93 10,000 10,028
6/30/93 10,399 10,255
9/30/93 10,732 10,486
12/31/93 10,817 10,504
3/31/94 10,585 10,291
6/30/94 10,494 10,229
9/30/94 10,613 10,313
12/31/94 10,705 10,302
3/31/95 11,270 10,754
6/30/95 11,866 11,292
9/30/95 12,046 11,479
12/31/95 12,282 11,883
3/31/96 12,245 11,784
6/30/96 12,428 11,859
9/30/96 12,702 12,068
12/31/96 13,074 12,364
</TABLE>
The graph above to the right compares the change in value of a $10,000
investment in the Monetta Trust Intermediate Bond Fund to the Lehman
Government/Corporate Intermediate Bond Index. The Lehman Government/Corporate
Intermediate Bond Index measures that specific segment of the bond market.
Please refer to footnote on the bottom of page 2.
- --------------------------------------------------------------------------------
PORTFOLIO COMPOSITION: MATURITY PROFILE:
1 Year or Less 25.7%
1 - 3 Years 9.2%
4 - 6 Years 30.2%
[PIE CHART APPEARS HERE 7 - 10 Years 34.3%
SHOWING % OF HOLDINGS] Over 10 Years 0.6%
-------
100.0%
=======
- --------------------------------------------------------------------------------
COMMENTARY:
Building on the Fund's first three quarters of strong performance, the Fund
posted impressive returns in the fourth quarter as well.
For the year ended December 31, 1996 the Fund's 6.5% return ranked it SECOND
among the 176 comparable funds in its category as measured by Lipper Analytical
Services, which averaged a return of 3.1%.
The Fund's 30-day SEC yield at December 31, 1996 was 5.65%. During the year, the
Fund paid out dividends to average a 5.7% income return.
The Fund's investments in intermediate term Treasury Notes made significant
contributions to total return throughout the year. Also, the emphasis on high
coupon corporate bonds provided higher yields in a relatively stable interest
environment.
By investing primarily in government securities, investment "quality" risk was
minimized and the Fund was able to generate a competitive return with low
volatility. This is consistent with our investment strategy.
The Fund's average maturity of 4.4 years is on the short-end of the spectrum.
The Fund is well positioned to take advantage of a rising interest rate
environment while providing a competitive return in a stable interest rate
environment.
Page 7
<PAGE>
MONETTA GOVERNMENT MONEY MARKET FUND PERIOD ENDED 12/31/96
Investment Objective: 7-Day Yield: Average Days to Maturity: Total Net Assets:
Income and Capital
Preservation 5.12% 72 Days $6.2 million
- --------------------------------------------------------------------------------
PERFORMANCE: AVERAGE ANNUAL TOTAL RETURN
1 Year 3 Years Since Incep. (3/1/93)
------ ------- ---------------------
MONETTA GOVERNMENT MONEY
MARKET FUND 5.1%** 5.0%** 4.5%**
LIPPER U.S. GOV'T MONEY MARKET
FUNDS AVG.* 4.8% 4.6% 4.1%
*Source Lipper Analytical Services, Inc.
**Total returns are net of advisory fees waived and voluntary absorption of all
or part of the Fund's operating expenses by the Advisor. Please refer to
footnote on the bottom of page 34.
An investment in the Monetta Government Money Market Fund is neither insured or
guaranteed by the U.S. Government. There can be no assurance that the Fund will
be able to maintain a stable $1.00 per share net asset value. Please refer to
footnote on the bottom of page 2.
- --------------------------------------------------------------------------------
PORTFOLIO COMPOSITION: ALLOCATION:
% OF NET ASSETS
U.S. Treasuries 34.2%
Government Agencies 66.6%
[PIE CHART APPEARS HERE --------
SHOWING % OF HOLDINGS] Total Investments 100.8%
Other Assets & Liabilities (0.8)%
--------
TOTAL 100.00%
========
- --------------------------------------------------------------------------------
COMMENTARY:
For the year ended December 31, 1996, the Government Money Market fund posted a
return of 5.1%. The Fund was ranked 13th of 115 comparable funds as measured by
Lipper Analytical Services. The average return of the 115 funds was 4.75%.
As of December 31, 1996, the Fund's 7-day yield was 5.12% versus the third
quarter yield of 5.17%. Average days to maturity was reduced to 72 days from 82
days on September 30.
We believe that short-term rates will be stable to moderately lower during the
first half of 1997.
Page 8
<PAGE>
INDEPENDENT AUDITORS' REPORT
The Boards of Directors and Trustees and the Shareholders of
Monetta Fund, Inc. and Monetta Trust:
We have audited the accompanying statements of assets and liabilities of Monetta
Fund, Inc. and Monetta Trust (comprising, respectively, the Mid-Cap Equity Fund,
Large-Cap Equity Fund, Balanced Fund, Intermediate Bond Fund and Government
Money Market Fund), collectively referred to as the "Funds", including the
schedules of investments, as of December 31, 1996, and the related statements of
operations for the period then ended, the statements of changes in net assets
for each of the periods presented in the two-year period then ended, and the
financial highlights for each of the periods presented in the ten-year period
then ended. These financial statements and financial highlights are the
responsibility of the Funds' management. Our responsibility is to express an
opinion on these financial statements and financial highlights based on our
audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material mistatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned, as of
December 31, 1996, by correspondence with the custodian and brokers. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of
Monetta Fund, Inc. and each of the respective funds constituting the Monetta
Trust as of December 31, 1996, the results of their operations for the period
then ended, the changes in their net assets for each of the periods presented in
the two-year period then ended, and the financial highlights for each of the
periods presented in the ten-year period then ended, in conformity with
generally accepted accounting principles.
KPMG PEAT MARWICK LLP
Chicago, Illinois
January 17, 1997
Page 9
<PAGE>
SCHEDULE OF INVESTMENTS
December 31, 1996
MONETTA FUND
Quoted
Shares or Market
Principal Value
Amount (In Thousands)
- --------- --------------
COMMON STOCKS - 85.7%
CONSUMER RELATED - 25.0% $52,979
BROADCASTING/CABLE TV - 2.5%
*25,000 American Radio
Systems Corp. $ 681
*90,000 Chancellor Corp. - CL A 2,138
*36,800 Metro Networks, Inc. 929
*50,000 SFX Broadcasting, Inc.- CL A 1,487
------
5,235
------
FOOD PROCESSING - 0.4%
*40,000 Morningstar Group, Inc. 785
------
RECREATION/ENTERTAINMENT - 2.4%
*50,000 Carmike Cinemas, Inc. 1,269
100,000 International Game Tech. 1,825
*37,500 Regal Cinemas, Inc. 1,153
*100,000 West Coast
Entertainment Corp. 875
------
5,122
------
RESTAURANTS/LODGING - 3.5%
50,000 CKE Restaurants, Inc. 1,800
*40,000 Doubletree Corp. 1,800
54,000 Innkeepers USA Trust 749
*35,000 Outback Steakhouse, Inc. 936
30,000 Patriot American Hospitality,
Inc. 1,294
*50,000 Planet Hollywood Int'l, Inc. 988
------
7,567
RETAIL MANUFACTURERS & DISTRIBUTION - 0.3%
*30,000 Hirsch Int'l Corp. - CL A 555
* 5,600 Quaker Fabric Corp. 78
------
633
------
RETAIL TRADES - 10.8%
*70,000 AnnTaylor Stores Corp. 1,225
*75,000 Bed Bath & Beyond 1,819
*50,000 Domnick's Supermarkets,
Inc. 1,087
40,000 Ethan Allen Interiors 1,540
*65,000 Friedmans's, Inc. - CL A 959
*75,000 Furniture Brands Int'l 1,050
*50,000 Goody's Family Clothing,
Inc. 894
*50,000 Nine West Group, Inc. 2,319
*80,000 Officemax, Inc. 850
*10,000 Proffitt's, Inc. 369
*50,000 Quiksilver, Inc. 1,069
40,000 Ross Stores, Inc. 2,000
*50,000 Ross Systems, Inc. 481
50,000 St. John Knits, Inc. 2,175
*50,000 Stage Stores, Inc. 912
*30,000 The Buckle, Inc. 750
*80,000 The Sports Authority, Inc. 1,740
*125,000 Vans, Inc. 1,562
------
22,801
------
MISCELLANEOUS - 5.1%
* 25,000 American Business Info. 556
*100,000 American Eco Corp. 687
* 70,000 CKS Group, Inc. 1,951
* 20,000 Caribiner Int'l, Inc. 1,005
* 5,000 Consolidated Graphics, Inc. 280
* 80,000 May & Speh, Inc. 980
* 40,000 Printrak International, Inc 340
* 40,000 U S Office Products Co 1,365
* 80,000 United Waste Systems, Inc. 2,750
* 55,000 Warrantech Corp. 633
* 15,000 World Color Press 289
------
10,836
------
Page 10
<PAGE>
SCHEDULE OF INVESTMENTS
December 31, 1996
- ------------------------
MONETTA FUND (CONTINUED)
- ------------------------
<TABLE>
<CAPTION>
Quoted
Shares or Market
Principal Value
Amount (In Thousands)
- --------- --------------
FINANCIAL RELATED - 11.6% $24,553
FINANCIAL SERVICES - 11.6%
<C> <S> <C>
50,000 Advanta Corp. - CL B $ 2,044
20,000 American Bankers Insr., Grp. 1,022
*50,000 Americredit Corp. 1,025
*60,000 BA Merchant Svcs, Inc.- CL A 1,073
12,800 W.R. Berkley Corp. 650
*40,000 Billing Information Concept 1,150
50,000 Capmac Holdings, Inc. 1,656
*100,000 Concord EFS, Inc. 2,825
30,000 Excel Realty Trust, Inc. 761
30,000 Executive Risk, Inc. 1,110
77,000 Fidelity National Fin'l, Inc. 1,165
30,000 Frontier Insur. Group, Inc. 1,148
30,000 Horace Mann Educators 1,211
*60,000 Imperial Credit Industries 1,260
*35,000 Life USA Holding, Inc. 420
30,000 National Data Corp. 1,305
*40,000 Oxford Resources
Corp. - CL A 1,235
45,000 Penncorp Financial Grp. 1,620
40,500 United Cos. Financial Corp. 1,078
30,000 Washington Federal, Inc. 795
-------
24,553
-------
INDUSTRIAL RELATED - 26.6% $56,196
ENERGY RESOURCES & SERVICES - 7.7%
*10,000 Atwood Oceanics, Inc. $ 635
*30,000 B.J. Services Co. 1,530
*100,000 Belco Oil & Gas Corp. 2,738
*50,000 Ensco Int'l 2,425
*50,000 Houston Exploration Co 875
*50,000 Newpark Resources, Inc. 1,863
*30,000 Seitel, Inc. 1,200
*100,000 Titan Exploration, Inc. 1,200
60,000 Transocean Offshore, Inc. 3,757
-------
16,223
-------
HOUSING - 0.7%
*25,000 American Homestar Corp. 569
43,000 T.J. International, Inc. 1,000
-------
1,569
-------
INDUSTRIAL & ELECTRONICS PRODUCTS - 12.3%
10,000 AAR Corporation 303
*40,000 AFC Cable Systems, Inc. 955
*60,000 Advanced Lighting Tech.,
Inc. 1,455
*65,000 BE Aerospace, Inc. 1,763
*25,000 Berg Electronics Corp. 734
10,000 Chart Industires, Inc. 171
*43,300 Checkpoint Systems, Inc. 1,072
*25,000 Coherent, Inc. 1,056
45,500 DT Industries, Inc. 1,593
*87,000 Foamex Int'l, Inc. 1,436
*45,000 Genrad, Inc. 1,046
20,000 Harman Int'l Industries, Inc. 1,113
50,000 Harnischfeger Industries,
Inc. 2,406
*27,200 JPM Company 476
*25,000 Lecroy Corp. 938
*40,000 Mohawk Industries 880
*50,000 O'Sullivan Industries
Holdings, Inc. 700
20,000 Precision Castparts Corp. 992
*50,000 Quad Systems Corp. 500
80,000 Spartech Corp. 890
*70,000 U.S. Filter Corp. 2,222
*50,000 Waters Corp. 1,519
*25,000 Wolverine Tube, Inc. 881
*40,000 Wyman-Gordon Co. 890
-------
25,991
-------
</TABLE>
Page 11
<PAGE>
SCHEDULE OF INVESTMENTS
December 31, 1996
MONETTA FUND (CONTINUED)
<TABLE>
<CAPTION>
Quoted
Shares or Market
Principal Value
Amount (In Thousands)
- --------- --------------
<C> <S> <C>
MINING/MINERAL RESOURCES - 2.7%
*75,000 Oregon Metallurgical Corp. 2,419
*100,000 Titanium Metals Corp. 3,287
-------
5,706
-------
TRANSPORTATION - 2.0%
35,000 Expeditors International of
Washington, Inc. 805
*50,000 Railtex, Inc. 1,263
*45,000 Swift Transportation 1,058
40,000 US Freightways Corp. 1,097
-------
4,223
-------
MISCELLANEOUS - 1.2%
*55,000 Alternative Resources Corp. 955
*40,000 Nichols Research Corp. 1,020
*18,500 Rental Service Corp. 509
-------
2,484
-------
MEDICAL RELATED - 10.3% $21,829
MEDICAL SUPPLIES - 1.6%
50,000 Ballard Medical Products $ 931
50,000 Fisher Scientific Int'l 2,356
-------
3,287
MEDICAL TECHNOLOGY - 1.3% -------
50,000 ADAC Laboratories 1,194
*20,000 Cohr, Inc. 540
*45,000 VISX, Inc. 995
-------
2,729
-------
PHARMACEUTICALS - 4.7%
*45,000 Applied Analytical Ind., Inc. 860
*100,000 Capstone Pharmacy
Services, Inc. 1,137
*75,000 ChiRex, Inc. 900
*45,000 Dura Pharmaceuticals, Inc. 2,149
30,000 Jones Medical Ind., Inc. 1,099
*21,000 Medicis Pharmaceutical
Corp. - CL A 924
*40,000 Parexel Int'l Corp. 2,065
*20,000 Watson Pharmaceuticals,
Inc. 899
-------
10,033
-------
PHYSICIAN SERVICES - 2.7%
*50,000 American Medical
Response, Inc. 1,625
*21,100 Medquist, Inc. 522
*70,000 Phycor, Inc. 1,987
*30,000 Renal Treatment Cntrs, Inc. 765
*150,000 Sheridan Healthcare, Inc. 881
-------
5,780
-------
TECHNOLOGY RELATED - 12.2% $25,757
COMPUTER SOFTWARE & SYSTEMS - 1.6%
*30,000 Acxiom Corp. $ 720
24,300 Logicon, Inc. 887
*45,400 Smallworldwide PLC 539
*50,000 Technology Modeling Assc.,
Inc. 663
20,000 Unison Software Inc. 535
-------
3,344
-------
COMPUTER & OFFICE EQUIPMENT - 2.9%
*30,000 Black Box Corp. 1,237
*75,000 Comverse Technology, Inc. 2,836
*20,000 Encad, Inc. 825
*50,000 Vanstar Corp. 1,225
-------
6,123
-------
SEMICONDUCTORS - 1.5%
*30,000 Microchip Technology, Inc. 1,526
*50,000 Quickturn Design Systems,
Inc. 1,025
*40,000 S3, Inc. 650
-------
3,201
-------
</TABLE>
Page 12
<PAGE>
SCHEDULE OF INVESTMENTS
December 31, 1996
- ------------------------------------------------------
MONETTA FUND (CONTINUED)
Quoted
Shares or Market
Principal Value
Amount (In Thousands)
- --------- --------------
TELECOMMUNICATIONS & EQUIPMENT - 6.2%
* 20,000 Boston Technology, Inc. 575
*180,000 Brightpoint, Inc. 5,355
* 62,000 Electromagnetic Sciences,
Inc. 1,194
* 75,000 Intermedia Communications,
Inc. 1,931
* 24,400 LCC Int'l, Inc. 451
*100,000 P-Com, Inc. 2,963
* 80,000 RMH Teleservices, Inc. 620
-------
13,089
-------
TOTAL COMMON STOCKS
(COST $163,187)(A) 181,314
-------
VARIABLE DEMAND NOTES - 1.5%
3,054,000 Eli Lilly - 5.33% 3,054
-------
COMMERCIAL PAPER - 15.3%
3,000,000 Ford Motor Credit 3,000
5.600% Due 01/02/97
7,000,000 Ford Motor Credit 6,998
5.500% Due 01/03/97
4,000,000 Merrill Lynch 3,996
6.150% Due 01/07/97
6,000,000 United Parcel Service 5,992
5.850% Due 01/09/97
4,000,000 Merrill Lynch 3,994
5.550% Due 01/10/97
2,500,000 Snap on Tool
5.750% Due 01/13/97 2,495
6,000,000 Manufacturers Inv. Corp.
5.900% Due 01/15/97 5,986
-------
TOTAL COMMERCIAL PAPER 32,461
-------
TOTAL SHORT-TERM INVESTMENTS 35,515
-------
TOTAL INVESTMENTS - 102.5%
(COST $198,702)(A) 216,829
-------
OTHER ASSETS LESS LIABILITIES - (2.5)% (5,312)
-------
NET ASSETS - 100% $211,517
=======
(a) Cost is identical for book and tax purposes; the aggregate gross unrealized
appreciation is $25,292 and aggregate gross unrealized depreciation is $7,165,
resulting in net unrealized appreciation of $18,127 (in thousands).
See accompanying notes to financial statements
* Non-income producing security
Page 13
<PAGE>
<TABLE>
<CAPTION>
SCHEDULE OF INVESTMENTS
December 31, 1996
- --------------------------------------------------------------------------------
MONETTA MID-CAP EQUITY FUND
Quoted
Shares or Market
Principal Value
Amount (In Thousands)
- --------- --------------
COMMON STOCKS - 96.5%
CONSUMER RELATED - 22.4% $3,877
FOOD PROCESSING - 2.2%
<C> <S> <C>
*10,000 Smithfield Foods, Inc. $ 380
------
RECREATION/ENTERTAINMENT - 1.5%
14,000 International Game Tech. 256
------
RESTAURANTS/LODGING - 1.6%
*6,000 Doubletree Corp. 270
------
RETAIL MANUFACTURERS & DISTRIBUTION - 3.9%
12,000 Avery-Dennison Corp. 425
8,000 Newell Company 252
------
677
------
RETAIL TRADES - 8.3%
7,000 CVS Corporation 290
*12,600 Domnick's Supermarkets, Inc. 274
*6,000 Nine West Group, Inc. 278
*8,000 Safeway, Inc. 342
5,500 T J X Companies, Inc. 260
------
1,444
------
MISCELLANEOUS - 4.9%
*3,300 Computer Sciences Corp. 271
10,000 Reynolds & Reynolds - CL A 260
*10,000 U.S.A. Waste Services, Inc. 319
------
850
------
FINANCIAL RELATED - 22.1% $3,832
FINANCIAL SERVICES - 22.1%
4,300 Aon Corp. 267
4,400 Associated First Cap. Corp. 194
*10,000 BA Merchant Svcs., Inc.- CL A 179
5,000 Compass Bancshares, Inc. 199
3,500 Crestar Financial Corp. 260
*20,000 Dime Bancorp, Inc. 295
4,050 Fifth Third Bancorp. 254
12,000 First Tennessee National 450
10,000 Green Tree Financial Corp. 386
10,000 Greenpoint Financial Corp. 474
10,000 PHH Corp. 430
10,000 Roosevelt Fin'l Group, Inc. 210
6,000 Union Planters Corp. 234
------
3,832
------
INDUSTRIAL RELATED - 37.3% $6,461
ENERGY RESOURCES & SERVICES - 6.5%
*1,600 Belco Oil & Gas Corp. 44
*6,000 Ensco Int'l 291
6,000 Kerr McGee Corp. 432
8,000 Tidewater, Inc. 362
------
1,129
------
HOUSING - 1.6%
12,000 Oakwood Homes 275
------
INDUSTRIAL & ELECTRONICS PRODUCTS - 24.5%
18,000 AMETEK, Inc. 401
10,000 Applied Power, Inc. - CL A 396
9,000 DT Industries, Inc. 315
</TABLE>
Page 14
<PAGE>
<TABLE>
<CAPTION>
Schedule of Investments
December 31, 1996
- --------------------------------------------------------------------------------
MONETTA MID-CAP EQUITY
FUND (CONTINUED)
Quoted
Shares or Market
Principal Value
Amount (In Thousands)
- --------- --------------
<S> <C>
10,000 Danaher Corp. 466
*14,000 Gulfstream Aerospace Corp 339
7,000 Harnischfeger Industries, Inc. 337
2,625 Molex, Inc. 103
8,000 Precision Castparts Corp. 397
6,000 Sigma-Aldrich Corp. 375
7,000 Sundstrand Corp. 297
14,400 Tri Mas Corp. 344
8,400 York Int'l Corp. 469
-------
4,239
-------
Transportation - 3.2%
*18,000 Knight Transportation, Inc. 342
*9,000 Swift Transportation Co., Inc. 212
-------
554
-------
Miscellaneous - 1.5%
5,000 Tyco Int'l, Ltd. 264
-------
Medical Related - 6.7% $ 1,158
Medical Supplies - 1.8%
6,800 Fisher Scientific Int'l $ 320
-------
Pharmaceuticals - 3.1%
*5,500 Dura Pharmaceuticals, Inc. 263
*8,000 Elan Corp PLC-ADR 266
-------
529
-------
Physician Services - 1.8%
*8,000 HEALTHSOUTH Corp. 309
-------
Technology Related - 8.0% $ 1,395
Computer Software & Systems - 4.4%
*4,000 Ceridian Corp. $ 162
*5,000 Parametric Technology Corp. 257
*10,000 Sterling Commerce, Inc. 352
-------
771
-------
Telecommunications & Equipment - 3.6%
*12,800 ADC Telecommunications, Inc. 398
*6,000 Tellabs, Inc. 226
-------
624
-------
Total Common Stocks
(Cost $13,540)(a) 16,723
-------
Variable Demand Notes - 3.6%
619,900 Sara Lee - 5.49% 620
-------
Total Investments - 100.1%
(Cost $14,160)(a) 17,343
-------
Other Assets Less Liabilities - (0.1)% (5)
-------
Net Assets - 100% $17,338
=======
</TABLE>
(a) Cost is identical for book and tax purposes; the aggregate gross unrealized
appreciation is $3,268 and aggregate gross unrealized depreciation is $85,
resulting in net unrealized appreciation of $3,183 (in thousands).
See accompanying notes to financial statements
* Non-income producing security
Page 15
<PAGE>
<TABLE>
<CAPTION>
SCHEDULE OF INVESTMENTS
December 31, 1996
- --------------------------------------------------------------------------
MONETTA LARGE-CAP EQUITY FUND
Quoted
Shares or Market
Principal Value
Amount (In Thousands)
- --------- --------------
<S> <C>
COMMON STOCKS - 87.1%
Consumer Related - 24.3% $558
Food Processing - 1.9%
600 Ralston-Ralston Purina Grp. $ 44
----
Retail Manufacturers & Distribution - 2.2%
1,000 Estee Lauder Co. - CL A 51
----
Retail Trades - 12.7%
1,200 CVS Corporation 50
1,700 Gap, Inc. 51
1,100 Home Depot, Inc. 55
1,200 J.C. Penney Co., Inc. 58
*600 Safeway, Inc. 26
1,100 Sears Roebuck, & Co. 51
----
291
----
Miscellaneous - 7.5%
1,400 Alco Standard Corp. 59
*600 Computer Sciences Corp. 49
*2,000 USA Waste Services, Inc. 64
----
172
----
Financial Related - 13.5% $310
Financial Services - 13.5%
1,500 Associated First Cap. Corp. $ 66
600 Fifth Third Bancorp 38
1,600 First Data Corp. 59
800 Fleet Financial Group 40
600 Household Int'l Inc. 55
1,200 Norwest Corp. 52
----
310
----
Industrial Related - 23.8% $543
Chemicals - 2.4%
1,400 Monsanto Co. $ 54
----
Energy Resources & Services - 8.9%
1,000 Coastal Corp. 49
500 Schlumberger, Ltd. 50
700 Transocean Offshore, Inc. 44
2,100 Union Pacific Resources 61
----
204
----
Industrial & Electronics Products - 2.1%
600 Illinois Tool Works, Inc. 48
----
Transportation - 5.4%
600 Boeing Co. 64
900 United Technologies Corp. 59
----
123
----
Miscellaneous - 5.0%
900 Fluor Corp. 56
700 Minnesota Mining & Mfg, Co. 58
----
114
----
Medical Related - 8.5% $194
Pharmaceuticals - 6.8%
900 Eli Lilly & Co. $ 65
800 Johnson & Johnson Co. 40
600 Pfizer, Inc. 50
----
155
----
Physician Services - 1.7%
*1,000 HEALTHSOUTH Corp. 39
----
Technology Related - 17.0% $388
Computer Software & Systems - 4.2%
950 Computer Associates Int'l, Inc. $ 47
*600 Microsoft Corp. 50
----
97
----
</TABLE>
Page 16
<PAGE>
<TABLE>
<CAPTION>
SCHEDULE OF INVESTMENTS
December 31, 1996
- ------------------------------------------------------------------------------
MONETTA LARGE-CAP EQUITY FUND (CONTINUED)
Quoted
Shares or Market
Principal Value
Amount (In Thousands)
- --------- --------------
<S> <C>
COMPUTER & OFFICE EQUIPMENT - 5.2%
*1,800 EMC Corporation 60
1,100 Xerox Corp. 58
--------------
118
--------------
SEMICONDUCTORS - 3.5%
600 Intel Corp. 79
--------------
TELECOMMUNICATIONS & EQUIPMENT - 4.1%
800 Northern Telecom, Ltd. 49
*1,200 Tellabs, Inc. 45
--------------
94
--------------
TOTAL COMMON STOCKS
(COST $1,783)(a) 1,993
--------------
VARIABLE DEMAND NOTES - 15.3%
61,700 Eli Lilly-5.33% 62
80,500 Johnson Controls-5.53% 80
42,600 Pitney Bowes-5.51% 43
95,600 Sara Lee-5.49% 96
69,400 Southwestern Bell-5.49% 69
--------------
TOTAL VARIABLE DEMAND NOTES 350
--------------
TOTAL INVESTMENTS - 102.4%
(COST $2,133)(a) 2,343
--------------
OTHER ASSETS LESS LIABILITIES - (2.4)% (55)
--------------
NET ASSETS - 100% $ 2,288
==============
</TABLE>
MONETTA BALANCED FUND
<TABLE>
<CAPTION>
Quoted
Shares or Market
Principal Value
Amount (In Thousands)
- --------- --------------
<S> <C>
COMMON STOCKS - 61.0%
CONSUMER RELATED - 17.3% $405
BROADCASTING/CABLE TV - 0.7%
*400 SFX Broadcasting, Inc. - CL A $ 12
*100 Univision Communications 4
--------------
16
--------------
FOOD PROCESSING - 1.2%
400 Ralston-Ralston Purina Grp. 29
--------------
RECREATION/ENTERTAINMENT - 1.0%
1,300 International Game Tech. 24
--------------
RESTAURANTS/LODGING - 1.2%
*600 Doubletree Corp. 27
--------------
RETAIL MANUFACTURERS & DISTRIBUTION - 3.5%
400 Avery-Dennison Corp. 14
400 Estee Lauder Cos - CL A 20
*1,500 Hirsch Int'l Corp - CL A 28
*1,400 Quaker Fabric Corp. 20
--------------
82
--------------
RETAIL TRADES - 4.9%
*1,200 AnnTaylor Stores Corp. 21
600 CVS Corporation 25
*1,100 Domnick's Supermarkets, Inc. 24
900 Gap, Inc. 27
200 Home Depot, Inc. 10
*200 Safeway, Inc. 8
--------------
115
--------------
</TABLE>
(a) Cost is identical for book and tax purposes; the aggregate gross unrealized
appreciation is $240 and aggregate gross unrealized depreciation is $30,
resulting in net unrealized appreciation of $210 (in thousands).
See accompanying notes to financial statements
* Non-income producing security
Page 17
<PAGE>
SCHEDULE OF INVESTMENTS
December 31, 1996
- -----------------------------------------------------------------------------
MONETTA BALANCED FUND (CONTINUED)
<TABLE>
<CAPTION>
Quoted
Shares or Market
Principal Value
Amount (In Thousands)
- --------- --------------
<S> <C>
MISCELLANEOUS - 4.8%
600 Alco Standard Corp. 25
*300 Computer Sciences, Inc. 25
*1,400 May & Speh, Inc. 17
1,000 Reynolds & Reynolds - CL A 26
*600 U.S.A. Waste Service 19
--------------
112
--------------
FINANCIAL RELATED - 6.3% $147
FINANCIAL SERVICES - 6.3%
*400 Associates First Cap. Corp. $ 18
*1,200 BA Merchant Svcs., Inc. - CL A 21
*1,200 Dime Bancorp, Inc. 18
400 First Data Corp. 15
500 Green Tree Financial Corp. 19
600 Greenpoint Financial Corp. 28
300 Household Int'l, Inc. 28
--------------
147
--------------
INDUSTRIAL RELATED - 23.9% $558
CHEMICALS - 1.0%
600 Monsanto Corp. $ 23
--------------
ENERGY RESOURCES & SERVICES - 6.0%
*100 Belco Oil & Gas Corp. 3
*600 Ensco Int'l 29
*600 Newpark Resources, Inc. 22
200 Schlumberger, Ltd. 20
*1,200 Titan Exploration, Inc. 15
400 Transocean Offshore, Inc. 25
900 Union Pacific Resources Grp. 26
--------------
140
--------------
HOUSING - 1.1%
1,100 T.J. International 26
--------------
INDUSTRIAL & ELECTRONICS PRODUCTS - 9.2%
*1,000 AFC Cable Systems, Inc. 24
*1,200 Advanced Lighting Tech. Inc. 29
*800 BE Aerospace, Inc. 22
1,100 Chart Industries, Inc. 19
800 DT Industries, Inc. 28
*1,500 Foamex Int'l, Inc. 25
100 Illinois Tool Works, Inc. 8
500 Sigma Aldrich Corp. 31
200 Sundstrand Corp. 8
400 York Int'l Corp. 22
--------------
216
--------------
TRANSPORTATION - 4.2%
200 Boeing Co. 21
*1,100 Railtex, Inc. 28
*900 Swift Transportation Co., Inc. 21
400 United Technologies Corp. 27
--------------
97
--------------
MISCELLANEOUS - 2.4%
500 Fluor Corp. 31
300 Minnesota Mining & Mfg 25
--------------
56
--------------
MEDICAL RELATED - 6.1% $143
MEDICAL SUPPLIES - 1.2%
600 Fisher Scientific Int'l $ 28
--------------
PHARMACEUTICALS - 3.6%
*500 Dura Pharmaceuticals, Inc. 24
500 Eli Lilly & Co. 36
300 Pfizer, Inc. 25
--------------
85
--------------
PHYSICIAN SERVICES - 1.3%
*1,200 Medquist, Inc. 30
--------------
</TABLE>
Page 18
<PAGE>
SCHEDULE OF INVESTMENTS
December 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MONETTA BALANCED FUND
(CONTINUED)
Quoted
Shares or Market
Principal Value
Amount (In Thousands)
- --------- --------------
<S> <C>
TECHNOLOGY RELATED - 7.4% $173
COMPUTER SOFTWARE & SYSTEMS - 3.2%
*500 Citrix Systems, Inc. $ 19
*300 Microsoft Corp. 25
*900 Sterling Commerce, Inc. 32
-------
76
-------
SEMICONDUCTORS - 1.7%
300 Intel Corp. 39
-------
TELECOMMUNICATIONS - 2.5%
400 Northern Telecom, Ltd. 25
*600 P-Com, Inc. 18
*400 Tellabs, Inc. 15
-------
58
-------
TOTAL COMMON STOCKS
(COST $1,311)(A) 1,426
-------
U.S. TREASURY NOTES - 31.8%
100,000 6.000% Due 05/31/98 100
100,000 6.000% Due 10/15/99 100
100,000 5.750% Due 10/31/00 99
100,000 6.500% Due 08/31/01 101
100,000 6.375% Due 08/15/02 101
100,000 5.750% Due 08/15/03 97
150,000 5.875% Due 02/15/04 146
-------
TOTAL US TREASURY NOTES 744
-------
VARIABLE DEMAND NOTES - 9.1%
110,000 Eli Lilly - 5.33% 110
101,700 Johnson Controls - 5.53% 102
-------
TOTAL VARIABLE DEMAND NOTES 212
-------
TOTAL INVESTMENTS - 101.9%
(COST $2,267)(A) 2,382
-------
OTHER ASSETS LESS LIABILITIES - (1.9)% (46)
-------
NET ASSETS - 100% $ 2,336
=======
</TABLE>
(a) Cost is identical for book and tax purposes; the aggregate gross unrealized
appreciation is $139 and aggregate gross unrealized depreciation is $24,
resulting in net unrealized appreciation of $115 (in thousands).
See accompanying notes to financial statements
* Non-income producing security
Page 19
<PAGE>
<TABLE>
<CAPTION>
SCHEDULE OF INVESTMENTS
December 31, 1996
- --------------------------------------------------------------------------------
MONETTA INTERMEDIATE
BOND FUND
Quoted
Shares or Market
Principal Value
Amount (In Thousands)
- --------- --------------
<S> <C>
Treasury Notes - 54.0%
300,000 6.250% Due 01/31/97 $ 300
200,000 5.500% Due 04/15/00 197
100,000 7.500% Due 11/15/01 105
200,000 6.375% Due 08/15/02 201
200,000 5.750% Due 08/15/03 194
200,000 5.875% Due 02/15/04 195
200,000 6.500% Due 05/15/05 202
100,000 6.500% Due 08/15/05 101
------
1,495
------
GOVERNMENT AGENCY - 1.5%
40,000 Sheboygan, WI TIF#6
8.25% Due 03/15/03 43
------
CORPORATE BONDS - 31.3%
100,000 Delta Airlines, 7.730%
Due 05/14/97 101
50,000 American Airlines, 8.700%
Due 01/15/98 51
50,000 Salomon, Inc., 9.375%
Due 04/15/98 52
100,000 Chase Manhatten Corp, 8.800%
Due 02/01/00 100
50,000 ADT Operations, 8.250%
Due 08/01/00 52
50,000 American Standard, 9.875%
Due 06/01/01 53
50,000 Dayton-Hudson, 9.750%
Due 07/01/02 57
100,000 IBM Corp., 7.250%
Due 11/01/02 103
100,000 RJR Nabisco, Inc., 8.625%
Due 12/01/02 103
100,000 Webb, Del E., 9.750%
Due 03/01/03 100
100,000 Salomon, Inc., 6.750%
Due 01/15/06 95
------
867
------
U.S. GOVERNMENT AGENCY OBLIGATIONS - 3.5%
100,000 Federal Home Loan Bank,
6.44% Due 11/28/05 96
------
MORTGAGE OBLIGATIONS - .6%
15,302 GNMA, 8.50%,
Due 07/15/21 16
------
DEMAND NOTES - 7.3%
102,200 Eli Lilly - 5.33% 102
100,000 Sara Lee - 5.49% 100
------
202
------
TOTAL INVESTMENTS - 98.2%
(COST $2,732)(A) 2,719
------
OTHER ASSETS LESS LIABILITIES - 1.8% 50
------
NET ASSETS - 100% $2,769
======
</TABLE>
(a) Cost is identical for book and tax purposes; the aggregate gross unrealized
appreciation is $11 and aggregate gross unrealized depreciation is $24,
resulting in net unrealized depreciation of $13 (in thousands).
See accompanying notes to financial statements
Page 20
<PAGE>
<TABLE>
<CAPTION>
SCHEDULE OF INVESTMENTS
December 31, 1996
MONETTA GOVERNMENT
MONEY MARKET FUND
Shares or
Principal VALUE
Amount (In Thousands)
- --------- --------------
<S> <C>
GOVERNMENT OBLIGATIONS - 34.2%
U.S. TREASURY BILLS - 34.2%
620,000 Due 03/06/97 $ 614
160,000 Due 03/20/97 158
420,000 Due 06/26/97 410
500,000 Due 07/24/97 485
480,000 Due 09/18/97 462
------
2,129
------
GOVERNMENT AGENCIES - 60.5%
FEDERAL FARM CREDIT
DISCOUNT NOTE - 6.9%
430,000 Due 01/27/97 428
------
FEDERAL AGRICULTURE MORTGAGE CORP
DISCOUNT NOTES - 14.6%
760,000 Due 01/02/97 760
150,000 Due 04/01/97 148
------
908
------
FEDERAL HOME LOAN BANK
DISCOUNT NOTE - 1.7%
110,000 Due 04/14/97 108
------
FEDERAL NATIONAL MORTGAGE ASSOCIATION
DISCOUNT NOTES - 25.2%
500,000 DUE 01/09/97 499
335,000 DUE 01/24/97 334
585,000 DUE 02/03/97 582
160,000 DUE 04/03/97 158
------
1,573
------
FEDERAL HOME LOAN MORTGAGE CORP
DISCOUNT NOTES - 12.1%
475,000 Due 01/15/97 474
80,000 Due 02/03/97 80
200,000 Due 02/18/97 199
------
753
------
REPURCHASE AGREEMENT - 6.1%
380,000 Dated 12/31/96, 3.50%
Due 01/02/97, with
Firstar Bank of Wisconsin,
collateralized by U.S.
Treasury Notes
(cost: $380,000) 380
------
TOTAL INVESTMENTS - 100.8%(A) 6,279
------
OTHER ASSETS LESS LIABILITIES - (0.8)% (47)
------
NET ASSETS - 100% $6,232
======
</TABLE>
(a) Cost is identical for book and tax purposes.
See accompanying notes to financial statements
Page 21
<PAGE>
<TABLE>
<CAPTION>
STATEMENTS OF ASSETS AND LIABILITIES
December 31, 1996
(In Thousands)
- ----------------------------------------------------------------------------------------------------------------------------------
MONETTA MID-CAP EQUITY
FUND FUND
-------------------------------------------------------
<S> <C> <C>
ASSETS:
Investments at market value (cost: $198,702; $14,160; $2,133;
$2,267; $2,732; $6,279)(Note 1) $216,829 $17,343
Cash 0 1
Interest and dividends receivable 101 14
Receivable for securities sold 0 0
- ----------------------------------------------------------------------------------------------------------------------------------
Total Assets 216,930 17,358
LIABILITIES:
Payables:
Custodial bank 455 0
Investment advisory fees (Note 2) 184 14
Investments purchased 4,606 0
Accrued expenses 168 6
- ----------------------------------------------------------------------------------------------------------------------------------
Total liabilities 5,413 20
- ----------------------------------------------------------------------------------------------------------------------------------
NET ASSETS $211,517 $17,338
- ----------------------------------------------------------------------------------------------------------------------------------
ANALYSIS OF NET ASSETS:
Paid in capital (b) 196,446 13,986
Accumulated undistributed net investment income 0 1
Accumulated undistributed net realized gain (loss) (3,056) 168
Net unrealized appreciation (depreciation) on investments 18,127 3,183
- ----------------------------------------------------------------------------------------------------------------------------------
Net assets $211,517 $17,338
- ----------------------------------------------------------------------------------------------------------------------------------
Net asset value, offering price, and redemption price per share
(13,351.9 shares of capital stock and 1,170.4; 186.5; 184.8; 271.3; 6,232.2
shares of beneficial interest issued and outstanding respectively) $15.84 $14.81
- ----------------------------------------------------------------------------------------------------------------------------------
See accompanying notes to financial statements
(a) Rounds to less than $1,000
(b) Amount for Monetta Fund represents $134 of $0.01 par value and $196,312 of
additional paid in capital, 100 million shares are authorized. Each fund
of Monetta Trust has an unlimited number of no par value shares of beneficial
interest authorized.
</TABLE>
Page 22
<PAGE>
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------
LARGE-CAP EQUITY BALANCED INTERMEDIATE BOND GOVERNMENT MONEY
FUND FUND FUND MARKET FUND
==========================================================================
<S> <C> <C> <C> <C>
$2,343 $2,382 $2,719 $6,279
(a) 21 0 0
4 15 53 (a)
3 7 2 0
- --------------------------------------------------------------------------
2,350 2,425 2,774 6,279
0 0 3 44
2 1 1 0
59 87 0 0
1 1 1 3
- --------------------------------------------------------------------------
62 89 5 47
- --------------------------------------------------------------------------
$2,288 $2,336 $2,769 $6,232
- --------------------------------------------------------------------------
2,066 2,210 2,786 6,232
(a) (a) (a) 0
12 11 (4) 0
210 115 (13) 0
- --------------------------------------------------------------------------
$2,288 $2,336 $2,769 $6,232
- --------------------------------------------------------------------------
$12.27 $12.64 $10.21 $1.00
- --------------------------------------------------------------------------
</TABLE>
Page 23
<PAGE>
<TABLE>
<CAPTION>
STATEMENTS OF OPERATIONS
Year Ended December 31, 1996
(In Thousands)
- --------------------------------------------------------------------------------------------------------
Monetta Mid-Cap Equity
Fund Fund
--------------------------------
<S> <C> <C>
INVESTMENT INCOME AND EXPENSES:
Investment income:
Interest $2,168 $107
Dividend 330 144
Miscellaneous income 77 1
- --------------------------------------------------------------------------------------------------------
Total investment income 2,575 252
- --------------------------------------------------------------------------------------------------------
Expenses:
Investment advisory fee (Note 2) 2,946 162
Custodial fees and bank cash management fee 84 11
Transfer and shareholder servicing agent fee 1,034 27
Other 0 (a)
- --------------------------------------------------------------------------------------------------------
Total expenses 4,064 200
Expenses waived and reimbursed 0 0
- --------------------------------------------------------------------------------------------------------
Expenses net of waived and reimbursed expenses 4,064 200
- --------------------------------------------------------------------------------------------------------
NET INVESTMENT INCOME (LOSS) (1,489) 52
- --------------------------------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Realized gains (loss) on investments:
Proceeds from sales 622,713 13,321
Cost of securities sold 624,708 12,898
- --------------------------------------------------------------------------------------------------------
Net realized gain (loss) on investments (1,995) 423
- --------------------------------------------------------------------------------------------------------
Net unrealized appreciation (depreciation) on investments:
Beginning of period 9,405 293
End of period 18,127 3,183
- --------------------------------------------------------------------------------------------------------
Net change in net unrealized appreciation/depreciation on
investments during the period 8,722 2,890
- --------------------------------------------------------------------------------------------------------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS 6,727 3,313
- --------------------------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS FROM OPERATIONS $5,238 $3,365
========================================================================================================
</TABLE>
See accompanying notes to financial statements
(a) Rounds to less than $1,000
Page 24
<PAGE>
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------
LARGE-CAP EQUITY BALANCED INTERMEDIATE BOND GOVERNMENT MONEY
FUND FUND FUND MARKET FUND
- -------------------------------------------------------------------------------
<S> <C> <C> <C>
$12 $20 $206 $310
14 4 2 0
(a) 0 (a) 0
- -------------------------------------------------------------------------------
26 24 208 310
- -------------------------------------------------------------------------------
14 5 20 21
4 4 4 3
3 2 4 15
(a) (a) 0 0
- -------------------------------------------------------------------------------
21 11 28 39
0 0 10 21
- -------------------------------------------------------------------------------
21 11 18 18
- -------------------------------------------------------------------------------
5 13 190 292
- -------------------------------------------------------------------------------
1,876 879 1,257 35,411
1,716 803 1,261 35,411
- -------------------------------------------------------------------------------
160 76 (4) 0
- -------------------------------------------------------------------------------
63 21 (9) 0
210 115 (13) 0
- -------------------------------------------------------------------------------
147 94 (4) 0
- -------------------------------------------------------------------------------
307 170 (8) 0
- -------------------------------------------------------------------------------
$312 $183 $182 $292
===============================================================================
</TABLE>
Page 25
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS
Year Ended December 31, 1996 and Period Ended December 31, 1995
(In Thousands)
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------------
MONETTA MID-CAP EQUITY
FUND FUND
--------------------------- --------------------------
1996 1995 1996 1995
-------------------------------------------------------
<S> <C> <C> <C> <C>
From investment activities:
Operations:
Net investment income (loss) $ (1,489) $ 647 $ 52 $ 59
Net realized gain (loss) on investments (1,995) 61,662 423 2,484
Net change in net unrealized appreciation
(depreciation) on investments during the period 8,722 26,918 2,890 316
- ------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets from operations 5,238 89,227 3,365 2,859
Distribution from net investment income 0 (647) (52) (59)
Distribution in excess of net investment income 0 (59,578) 0 (2,897)
Distribution from net realized gains on securities 0 0 0 (19)
- ------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets from investment activities 5,238 29,002 3,313 (116)
========================================================================================================================
From capital transactions (Note 3):
Proceeds from shares sold 19,940 22,913 5,820 2,203
Net asset value of shares issued through dividend
reinvestment (a) 59,595 50 2,930
Cost of shares repurchased (176,381) (113,702) (6,061) (2,538)
- ------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets from capital transactions (156,441) (31,194) (191) 2,595
========================================================================================================================
Total increase (decrease) in net assets (151,203) (2,192) 3,122 2,479
- ------------------------------------------------------------------------------------------------------------------------
Net assets at beginning of period 362,720 364,912 14,216 11,737
- ------------------------------------------------------------------------------------------------------------------------
Net assets at end of period* $ 211,517 $ 362,720 $17,338 $14,216
========================================================================================================================
</TABLE>
See accompanying notes to financial statements
(a) Rounds to less than $1,000
* Including undistributed net investment income of $1 thousand for the Mid-Cap
Equity Fund at December 31, 1996.
Page 26
<PAGE>
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------
Large-Cap Equity Balanced Intermediate Government Money
Fund Fund Bond Fund Market Fund
- ------------------- ----------------- -------------- ------------------
Period Period
Ending Ending
1996 12/31/95 1996 12/31/95 1996 1995 1996 1995
- -----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
$ 5 $ (a) $ 13 $ (a) $ 190 $ 213 $ 292 $ 205
160 (8) 76 (4) (4) 83 0 0
147 63 94 21 (4) 156 0 0
- -----------------------------------------------------------------------------
312 55 183 17 182 452 292 205
(4) (a) (13) (a) (190) (215) (292) (205)
0 0 0 (a) (17) (38) 0 0
(141) 0 (61) 0 0 0 0 0
- -----------------------------------------------------------------------------
167 55 109 17 (25) 199 0 0
=============================================================================
1,496 1,019 1,941 445 653 701 15,949 4,068
144 (a) 72 (a) 175 229 268 196
(591) (2) (196) (52) (1,623) (550) (14,378) (3,186)
- -----------------------------------------------------------------------------
1,049 1,017 1,817 393 (795) 380 1,839 1,078
=============================================================================
1,216 1,072 1,926 410 (820) 579 1,839 1,078
- -----------------------------------------------------------------------------
1,072 0 410 0 3,589 3,010 4,393 3,315
- -----------------------------------------------------------------------------
$2,288 $1,072 $2,336 $410 $2,769 $3,589 $6,232 $4,393
=============================================================================
</TABLE>
Page 27
<PAGE>
NOTES TO FINANCIAL STATEMENTS
December 31, 1996
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES:
Monetta Fund, Inc. ("Monetta Fund") is an open-end diversified management
investment company registered under the Investment Company Act of 1940, as
amended. The primary objective of Monetta Fund is capital appreciation by
investing primarily in equity securities believed to have growth potential. The
Fund generally invests in companies with a market capitalization range of $50
million to $1 billion.
Monetta Trust ("the Trust") is an open-end diversified management investment
company registered under the Investment Company Act of 1940, as amended. The
following funds are series of the Trust:
Mid-Cap Equity Fund. The primary objective of this fund is long-term capital
growth by investing in common stocks believed to have above average growth
potential. The Fund typically invests in companies within a market
capitalization range of $1 billion to $5 billion.
Large-Cap Equity Fund. The primary objective of this fund is to seek long-term
capital growth by investing in common stocks believed to have above average
growth potential. The Fund typically invests in companies with market
capitalization of greater than $5 billion.
Balanced Fund. The objective of this fund is to seek a favorable total rate of
return through capital appreciation and current income consistent with
preservation of capital, derived rom investing in a portfolio of equity and
fixed income securities.
Intermediate Bond Fund. The objective of this fund is to seek high current
income consistent with the preservation of capital by investing primarily in
marketable debt securities.
Government Money Market Fund. The primary objective of this fund is to seek
maximum current income consistent with safety of capital and maintenance of
liquidity. The Fund invests in U.S. Government securities maturing in thirteen
months or less from the date of purchase and repurchase agreements for U.S.
Government securities. U.S. Government securities include securities issued or
guaranteed by the U.S. Government or by its agencies or instrumentalities.
Monetta Family of Funds is comprised of Monetta Fund, Inc. and each of the
Trust Series and are collectively referred to as the "Funds". The following is a
summary of significant accounting policies followed by the Funds in the
preparation of their financial statements in accordance with generally accepted
accounting principles:
Page 28
<PAGE>
NOTES TO FINANCIAL STATEMENTS
December 31, 1996
- --------------------------------------------------------------------------------
(a) Securities Valuation
Investments are stated at market value based on the last reported sale price on
national securities exchanges, or the NASDAQ Market, on the last business day
of the period. Listed securities and securities traded on the over-the-counter
markets that did not trade on the last business day are valued at the mean
between the quoted bid and asked prices. Short-term securities, including all
securities held by the Government Money Market Fund, are stated at amortized
cost, which is substantially equivalent to market value.
(b) Use of Estimates
The preparation of financial statements in conformity with generally accepted
accounting principles requires the Funds' management to make estimates and
assumptions that affect reported amounts of assets and liabilities and
disclosures of contingent assets and liabilities at the date of the financial
statements and the results of operations during the reporting period. Actual
results could differ from those estimates.
(c) Federal Income Taxes
It is each Fund's policy to comply with the requirements of the Internal Revenue
Code applicable to regulated investment companies and to distribute
substantially all of its taxable income to its shareholders. Accordingly, no
provision for federal income taxes is required.
The Funds intend to utilize provisions of the federal income tax laws which
allow them to carry a realized capital loss forward for eight years following
the year of the loss and offset such losses against any future realized capital
gains. At December 31, 1996, Monetta Fund and the Intermediate Bond Fund had
accumulated capital loss carry forward for tax purposes of $2,873,526 and $3,497
respectively, which will expire on December 31, 2004. Net realized losses of the
funds may differ for financial statements and tax purposes because of the
deferral of post October 31 losses and wash sale losses for tax purposes.
(d) General
Security transactions are accounted for on a trade date basis. Daily realized
gains and losses from security transactions are reported on the first-in, first-
out cost basis. Interest income is recorded daily on the accrual basis and
dividend income on the ex-dividend date. Bond Discount/Premium is amortized on a
straight line basis over the life of each applicable security.
(e) Distributions of incomes and gains
Distributions to shareholders are recorded by the Funds (except for the
Government Money Market Fund) on the ex-dividend date. The Government Money
Market Fund declares dividends daily and automatically reinvests such dividends
daily. Due to inherent differences in the characterization of short-tern capital
gains under generally accepted accounting principles and for federal income tax
purposes, the amount of distributable net investment income for book and federal
income tax purposes may differ. These differences are permanent in nature, and
may result in distributions in excess of book basis net investment income for
certain periods.
Page 29
<PAGE>
NOTES TO FINANCIAL STATEMENTS
December 31, 1996
- -------------------------------------------------------------------------------
For the Monetta Fund, a permanent book and tax differences of $1,489,412 due to
the net operating loss for 1996 has been reclassified from accumulated
undistributed net investment income to paid in capital.
For the year ended December 31, 1996, Monetta Trust Large-Cap Equity Fund paid
long-term capital gains of $5,155.
2. RELATED PARTIES:
Robert S. Bacarella is an officer and director of the Funds and also an
officer, director and majority shareholder of the investment advisor, Monetta
Financial Services, Inc. "Advisor". For twelve months ended December 31, 1996,
remuneration required to be paid to all interested director or trustee has been
absorbed by the Advisor. Fees paid to outside Directors or Trustees have been
absorbed by the respective funds.
Each Fund pays an investment advisory fee to the Advisor, based on that
Fund's individual net assets, payable monthly at the annual rate of 1% for
Monetta Fund, Mid-Cap and Large-Cap Equity Fund; 0.65% for Balanced Fund; 0.60%
for Intermediate Bond Fund and 0.35% for the Government Money Market Fund. From
these fees the Advisor pays all the Fund's ordinary operating expenses other
than the advisory fee and charges of the Fund's custodian and transfer agent.
Investment advisory fees waived through December 31, 1996, for the Intermediate
Bond Fund were $9,915 of total fees of $19,829. Investment advisory fees waived
through December 31, 1996 for the Government Money Market Fund were $20,637.
Additionally, brokerage commissions of $32,700 were paid by the Monetta Fund to
Monetta Brokerage, Inc. during the twelve months ended December 31, 1996.
<TABLE>
<CAPTION>
Shares Owned
by the Advisor
----------------------------
Shares % of Fund
------ ---------
<S> <C> <C>
Mid-Cap Fund 7,368 0.6%
Large-Cap Fund 11,048 5.9%
Balanced Fund 55,061 29.8%
Intermediate Bond Fund 74,014 27.3%
Government Money Market Fund 515,735 8.3%
</TABLE>
Page 30
<PAGE>
<TABLE>
<CAPTION>
NOTES TO FINANCIAL STATEMENTS
December 31, 1996
- ----------------------------------------------------------------------------------------------------------------------------------
3. CAPITAL STOCK AND SHARE UNITS:
There are 100,000,000 shares of $0.01 par value capital stock authorized
for Monetta Fund. There is an unlimited number of no par value shares of
beneficial interest authorized for each series of the Trust.
- -----------------------------------------------------------------------------------------------------------------------------------
Monetta Mid-Cap Large-Cap Balanced Intermediate Government
(In Thousands) Fund Equity Fund Equity Fund Fund Bond Fund Money Market
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1995 Beginning shares 25,140 962 -- -- 313 3,315
- -----------------------------------------------------------------------------------------------------------------------------------
Shares sold 1,400 161 101 44 69 4,068
Shares issued upon dividend reinvestment 3,779 249 (a) (a) 22 196
Shares redeemed (7,054) (184) (a) (5) (54) (3,186)
- -----------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in shares outstanding (1,875) 226 101 39 37 1,078
- -----------------------------------------------------------------------------------------------------------------------------------
1996 Beginning shares 23,265 1,188 101 39 350 4,393
- -----------------------------------------------------------------------------------------------------------------------------------
Shares sold 1,270 436 123 157 64 15,949
Shares issued upon dividend reinvestment 0 3 12 6 17 268
Shares redeemed (11,183) (457) (49) (17) (160) (14,378)
- -----------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in shares outstanding (9,913) (18) 86 146 (79) 1,839
- -----------------------------------------------------------------------------------------------------------------------------------
Ending shares 13,352 1,170 187 185 271 6,232
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(a) Rounds to less than 1,000 shares
4. PURCHASES AND SALES OF INVESTMENT SECURITIES:
The cost of purchases and proceeds from sales of securities for the twelve
months ended December 31, 1996, excluding short-term securities were:
Monetta Fund $520,227,594 and $622,713,282; Mid-Cap Fund $13,763,756 and
$13,320,927; Large-Cap Fund $2,598,595 and $1,876,618; Balanced Fund
$2,573,763 and $878,878; and Intermediate Bond Fund $810,500 and
$1,257,667. The cost of purchases and proceeds from the sales of government
securities included in the preceding numbers are as follows: Balanced Fund
$846,788 and $228,640; and Intermediate Bond Fund $500,500 and $605,641.
Page 31
<PAGE>
<TABLE>
<CAPTION>
NOTES TO FINANCIAL STATEMENTS
December 31, 1996
- -------------------------------------------------------------------------------------------------------------------
5. FINANCIAL HIGHLIGHTS:
MONETTA FUND
Financial highlights for Monetta Fund for a share of capital stock outstanding throughout the period is
presented below:
1996 1995 1994 1993 1992
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value at beginning of period $15.591 $14.515 $15.539 $15.992 $15.731
- -------------------------------------------------------------------------------------------------------------------
Net investment income (loss) (.079) .029 (.026) .028 .006
Net realized and unrealized gain (loss)
on investments .330 4.075 (.938) .105 .855
- -------------------------------------------------------------------------------------------------------------------
Total from investment operations: .251 4.104 (.964) .077 .861
Less:
Distributions from net investment income 0 (.028) 0 0 (.006)
Distributions in excess of net investment
income 0 (3.000) (.060) (.475) (.594)
Distributions from net realized gains on
securities 0 0 0 (.055) 0
- -------------------------------------------------------------------------------------------------------------------
Total distributions 0 (3.028) (.060) (.530) (.600)
- -------------------------------------------------------------------------------------------------------------------
Net asset value at end of period $15.842 $15.591 $14.515 $15.539 $15.992
- -------------------------------------------------------------------------------------------------------------------
Total return 1.60% 28.02% (6.21)% 0.49% 5.49%
Ratio to average net assets:
Expenses* 1.38% 1.36% 1.35% 1.38% 1.45%
Net investment income* (.51)% .18% (.15)% (.19)% .16%
Avg. comm. paid - per equity trade(a) $ .063 --- --- --- ---
Portfolio turnover 204.8% 272.0% 191.3% 226.9% 126.6%
Net assets (in millions) $ 211.5 $ 362.7 $ 364.9 $ 524.3 $ 408.0
===================================================================================================================
</TABLE>
* If certain expenses had not been assumed by the investment advisor in 1989,
the ratios of expenses and net investment income to average net assets would
have been 1.83% of 1.92%, respectively.
(a) Represents the average commissions paid on equity transactions entered into
during the period where commissions were applicable. This disclosure is not
applicable for periods prior to 1996.
The per share ratios are calculated using the weighted average number of shares
outstanding during the period.
Page 32
<PAGE>
<TABLE>
<CAPTION>
1991 1990 1989 1988 1987
- ----------------------------------------------------------
<S> <C> <C> <C> <C>
$10.963 $10.441 $ 9.933 $ 9.649 $ 9.670
- ----------------------------------------------------------
.081 .103 .219 .106 .113
6.037 1.106 1.274 2.158 .016
- ----------------------------------------------------------
6.118 1.209 1.493 2.264 .129
(.081) (.103) (.219) (.106) (.150)
(1.208) (.584) (.766) 1.874 0
(.061) 0 0 0 0
- ----------------------------------------------------------
(1.350) (.687) (.985) (1.980) (.150)
- ----------------------------------------------------------
$15.731 $10.963 $10.441 $ 9.933 $ 9.649
- ----------------------------------------------------------
55.90% 11.37% 15.20% 23.07% 1.54%
1.42% 1.50% 1.57% 1.50% 2.31%
.93% 1.09% 2.18% .96% 1.33%
-- -- -- -- --
153.8% 206.5% 258.4% 170.4% 333.5%
$57.1 $6.1 $3.5 $2.6 $2.1
- ----------------------------------------------------------
</TABLE>
Page 33
<PAGE>
NOTES TO FINANCIAL STATEMENTS
December 31, 1996
- --------------------------------------------------------------------------------
Financial highlights for each Fund of the Trust for a share outstanding
throughout the period is presented below:
<TABLE>
<CAPTION>
MID-CAP EQUITY LARGE-CAP EQUITY
FUND FUND
----------------------------------------- ----------------------------
3/1/93 9/1/95
Through Through
1996 1995 1994 12/31/93 1996 12/31/95
-----------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value at beginning of period* $11.962 $12.199 $12.537 $10.000 $10.571 $10.000
- ------------------------------------------------------------------------------------------------------------------------
Net investment income .044 .059 .071 .006 .023 .005
Net realized and unrealized gain (loss)
on investments 2.852 2.874 .193 3.531 2.928 .570
- ------------------------------------------------------------------------------------------------------------------------
Total from investment operations 2.896 2.933 .264 3.537 2.951 .575
Less:
Distributions from net investment
income (.044) (.050) (.069) (.006) (.023) (.004)
Distributions in excess of net
investment income 0 (2.990) (.533) (.994) (1.188) 0
Distributions from net realized
gains on securities 0 (.130) 0 0 (.045) 0
- ------------------------------------------------------------------------------------------------------------------------
Total distributions (.044) (3.170) (.602) (1.000) (1.256) (.004)
- ------------------------------------------------------------------------------------------------------------------------
Net asset value at end of period $14.814 $11.962 $12.199 $12.537 $12.266 $10.571
- ------------------------------------------------------------------------------------------------------------------------
Total return* 24.20% 24.54% 2.17% 35.40% 28.20% 5.74%
Ratios to average net assets:
Expenses** 1.23% 1.25% 1.30% 1.12% 1.51% 0.69%
Net investment income** 0.32% 0.44% 0.57% 0.07% 0.31% 0.05%
Avg. comm paid-per equity trade(a) $ .066 -- -- -- $ .051 --
Portfolio turnover 93.3% 254.4% 210.0% 128.1% 152.7% 38.2%
Net assets (in thousands) $17,338 $14,216 $11,736 $ 9,841 $ 2,288 $ 1,072
========================================================================================================================
</TABLE>
* Ratios and total return for the year of inception are calculated from the
date of inception to the end of the period.
** If certain investment advisory fees and charges of the Trusts custodian and
transfer agent had not been assumed by the investment advisor, the ratios of
expenses and net income to average net assets would be as follows: for the
Intermediate Bond Fund, expenses would have been 0.85%, 0.75%, 0.88% and
0.75% for 1996, 1995, 1994 and 1993 respectively. For the Government Money
Market Fund, expenses would have been 0.67%, 0.59%, 0.66% and 0.69%, for
1996, 1995, 1994 and 1993 respectively. For the Intermediate Bond Fund, net
investment income would have been 5.45%, 5.46%, 5.34% and 3.66% for 1996,
1995, 1994 and 1993 respectively. For the Government Money Market Fund, the
investment income would have been 4.59%, 5.17%, 3.39% and 1.66% for 1996,
1995, 1994 and 1993 respectively.
(a)Represents the average commissions paid on equity transactions entered into
during the period where commissions were applicable. This disclosure is not
applicable for periods prior to 1996.
The per share ratios are calculated using the weighted average number of
shares outstanding during the period.
Page 34
<PAGE>
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
BALANCED INTERMEDIATE BOND GOVERNMENT MONEY MARKET
FUND FUND FUND
- --------------------- -------------------------------------------------- ----------------------------------------------
9/1/95 3/5/93 3/1/93
Through Through Through
1996 12/31/95 1996 1995 1994 12/31/93 1996 1995 1994 12/31/93
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
$10.605 $10.000 $10.244 $ 9.624 $10.345 $10.000 $1.000 $1.000 $1.000 $1.000
- ---------------------------------------------------------------------------------------------------------------------------
.132 .009 .612 .655 .589 .357 .049 .059 .040 .023
2.598 .602 .019 .740 (.690) .447 0 0 0 0
- ---------------------------------------------------------------------------------------------------------------------------
2.730 .611 .631 1.395 (.101) .804 .049 .059 .040 .023
(.132) (.004) (.612) (.655) (.580) (.357) (.049) (.059) (.040) (.023)
(.560) (.002) (.055) (.120) (.040) (.102) 0 0 0 0
0 0 0 0 0 0 0 0 0 0
- ---------------------------------------------------------------------------------------------------------------------------
(.692) (.006) (.667) (.775) (.620) (.459) (.049) (.059) (.040) (.023)
- ---------------------------------------------------------------------------------------------------------------------------
$12.643 $10.605 $10.208 $10.244 $ 9.624 $10.345 $1.000 $1.000 $1.000 $1.000
- ---------------------------------------------------------------------------------------------------------------------------
25.94% 6.16% 6.46% 14.84% (1.04)% 8.17% 5.06% 5.87% 4.04% 2.21%
1.40% 0.91% 0.55% 0.27% 0.28% 0.28% 0.31% 0.07% 0.0% 0.03%
1.54% 0.08% 5.75% 5.94% 5.94% 4.13% 4.95% 5.69% 4.04% 2.32%
$ .056 -- N/A N/A N/A N/A N/A N/A N/A N/A
117.8% 54.8% 28.9% 75.1% 94.5% 32.3% N/A N/A N/A N/A
$ 2,336 $ 410 $ 2,769 $ 3,589 $ 3,010 $ 2,959 $6,232 $4,393 $3,315 $1,859
===========================================================================================================================
</TABLE>
Page 35
<PAGE>
ANNUAL REPORT
DECEMBER 31, 1996
MONETTA FAMILY OF FUNDS
MONETTA FUND, INC.
MONETTA MID-CAP EQUITY FUND
MONETTA LARGE-CAP EQUITY FUND
MONETTA BALANCED FUND
MONETTA INTERMEDIATE BOND FUND
MONETTA GOVERNMENT MONEY [LOGO OF MONETTA]
MARKET FUND
MONETTA FUNDS
1776-A SOUTH NAPERVILLE ROAD
SUITE 207
WHEATON, ILLINOIS 60187
1-800-MONETTA (666-3882)
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<LEGEND> This schedule contains summary financial information extracted from the
audited Annual Report of the Registrant dated December 31, 1996 and is qualified
in its entirety by reference to such financial statements.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> Dec-31-1996
<INVESTMENTS-AT-COST> 198,702
<INVESTMENTS-AT-VALUE> 216,829
<RECEIVABLES> 101
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 216,930
<PAYABLE-FOR-SECURITIES> 4,606
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 807
<TOTAL-LIABILITIES> 5,413
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 196,446
<SHARES-COMMON-STOCK> 13,352
<SHARES-COMMON-PRIOR> 23,265
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (3,056)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 18,127
<NET-ASSETS> 211,517
<DIVIDEND-INCOME> 330
<INTEREST-INCOME> 2,168
<OTHER-INCOME> 77
<EXPENSES-NET> 4,064
<NET-INVESTMENT-INCOME> (1,489)
<REALIZED-GAINS-CURRENT> (1,995)
<APPREC-INCREASE-CURRENT> 8,722
<NET-CHANGE-FROM-OPS> 5,238
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 1,270
<NUMBER-OF-SHARES-REDEEMED> 11,183
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> (151,203)
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> (1,061)
<OVERDISTRIB-NII-PRIOR> 0
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<GROSS-ADVISORY-FEES> 2,946
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 4,064
<AVERAGE-NET-ASSETS> 294,084
<PER-SHARE-NAV-BEGIN> 15.59
<PER-SHARE-NII> (.08)
<PER-SHARE-GAIN-APPREC> .33
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 15.84
<EXPENSE-RATIO> 1.38
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
